A dispute between shareholders can derail the small and medium-sized businesses that make up the bulk of the Australian economy. Here we explain how a shareholders agreement can help reduce the risk of serious dispute.
Fast track sales involve the voluntary administrator selling the assets of a business during a voluntary administration, instead of recommending a debt compromise or ‘Deed of Company Arrangement’. While a fast track sale in a voluntary administration is legal, it is relatively uncommon in Australia. Here we explain how fast track sales work, and consider whether they are a desirable feature of Australian insolvency law. If it occurs, company directors may feel betrayed by a voluntary administrator if they are expecting a debt restructure through a ‘Deed of Company Arrangement’.
Australia applies ‘worldwide taxation’ when calculating corporate and personal income tax. This means Australian startups can owe tax in Australia for all their international activities, even where the founder has moved overseas. Here we explain the key tax rules for Australian startups.
When a business struggles, change is needed to get that business moving in the right direction. One tactic that could be implemented is increasing prices.
We have sent a comprehensive Submission to the Australian Senate Inquiry into Corporate Insolvency in Australia. This is the executive summary and we also provide a link to the entire document.
The primary way in which creditors can influence a voluntary administration is through participation in either the first or second creditors’ meeting — meetings chaired by the voluntary administrator. Through this process creditors can replace voluntary administrators, have a say on remuneration and costs, approve of a debt compromise and more.
Company reorganisation or restructuring is the most common way of turning around a struggling business that is insolvent, or at risk of becoming so.
Once the DOCA is being administered, there is no longer a moratorium on ‘ipso facto’ clauses. In short, this allows suppliers, landlords and other creditors with suitable contracts to immediately terminate those contracts on appointment of the deed administrator.
Cashflow refers to the movement of money into and out of business, and it is one of the essential financial indicators for the business. This is why a proper financial record keeping is so important.
Debt and asset restructuring for financially distressed companies has taken on a new significance in Australia with the introduction of a new process last year — small business debt restructuring.
Businesses can struggle or fail in different ways. Consider an unprofitable transport business that hasn’t been able to put up rates in 20 years due to stiff competition. Or, consider the same type of business, where its unprofitability is caused by the inability to pay debts entered into by prior directors.
Are you owed money by a company that is being wound up? Don’t get your hopes up until you have seen the 3 month statutory liquidator’s report. It is this report that will give a clear indication of the likelihood of a return.